Further Dynamic Factors

Kurt Rothschild first presented the view that powerful monopolies would arise in an integrated area and that the increased degree of
monopoly would create inefficiencies in resource allocation.2 Kindleberger also declares that cartel agreements are likely to be reached
in a customs union and adds that, if competition actually did increase,
potential large-scale economies would be forgone.3 Finally, Perroux
maintains that the common market is "the fruit of the capitalism of
monopolies," and that the abolition of customs barriers will inevitably

result in a strengthening of monopoly positions, accompanied by the
formation of international cartels.4